Commodity currencies outperform

<p>The only surprise from the ECB yesterday was the German protester as although the economic data and credit improvements were acknowledged, the ECB president described […]</p>

The only surprise from the ECB yesterday was the German protester as although the economic data and credit improvements were acknowledged, the ECB president described the risks to the economic outlook as now being ‘more balanced’. The market consensus view is that policy remains unchanged so core yields will continue to fall as Mario Draghi dismissed talk of early bond purchases as ‘premature’ and a ‘little exaggerated’.

The dollar traded under pressure following another bout of weaker data from the US as both industrial production and the Empire state manufacturing disappointed the dollar bulls. This lead the markets to question the Q2 US growth Spring improvement theory. The data releases from across the pond today are second tier with the impact likely to be minimal with housing data and weekly jobless claims.

The last 24 hours has seen both the CAD and AUD outperform in G10 space. The BoC surprised the market with a hawkish tone as they upgraded growth expectation for Q2 and Q3 as they described the inflation outlook as ‘finely balanced’ with the lower CAD being attributed to the inflation pick up. They described shocks to the economy from the oil price as ‘more front loaded than predicted in January’ as they highlighted positive signs in the labour market.

The AUD was the star performer in the Asian session following a surprisingly strong labour report as Australia added 37.7k jobs as the components revealed a robust 31.5k increase in full time jobs with the overall unemployment rate dropping to 6.1%.



 1.0580-1.0505-1.0460 | Resistance 1.0750-1.0800-1.1050



118.80-118.20-116.80| Resistance 120.20-120.85-121.55



Supports 1.4700-1.4550-1.4350 | Resistance 1.4980-1.5170-1.5270

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